The company behind Fyre Festival, the luxuriously advertised music festival in the Bahamas that never happened and instead descended into a public disaster, won't be paying its employees for their work on the failed event.
That's the news that Fyre co-founder Billy McFarland gave employees last week in a telephone conference that was obtained by Vice News. After delivering the news, McFarland said the company behind the festival, Fyre App, would nevertheless love to have employees stick around and "hunker down and get back to a place where things resume to business as usual."
Without pay, though.
"Unfortunately, we are not able to proceed with payroll immediately for the company," McFarland told employees in the recording of the meeting. "I understand this is not an ideal situation for everybody, and this will likely cause a lot of you to resign."
Despite not being able to pay, McFarland told employees the company would not be firing or laying off any workers, which employees quickly pointed out to the entrepreneur would prevent them from being able to collect unemployment benefits.
"I'm not aware how this impacts the employee benefits," McFarland said.
McFarland did not respond to multiple requests for comment.
Fyre Festival promised a music and food event attended by sexy models, high-end accommodations, and gourmet food — and delivered none of it.
Instead, the company is facing a $100 million lawsuit against McFarland and co-founder Ja Rule, claiming the festival descended into chaos. The company is accused of fraud, negligent representation, and breach of contract.
McFarland, in a previous interview, told BuzzFeed News the festival grew beyond the capacity its 300 employees were able to handle. Employees, however, have pointed to signs that the festival was headed toward disaster early in the planning stages.
The company has promised refunds for all of the people who bought tickets for the event, including those who coughed up thousands of dollars to attend.
In a previous interview with BuzzFeed News, McFarland had said that despite worries from employees, all the company's workers and vendors involved in the festival would be compensated.
"All venders and employees are being paid," he told BuzzFeed News April 28.
In the phone call published by Vice News, McFarland said that was no longer the case.
"We're not firing anybody, we're just letting you know there will be no payroll in the short term," he said.
McFarland then told employees that if they needed to be "let go" to collect benefits that he could arrange that, and to reach out to him via email. That, however, prompted another worker to say they have had difficulty proving they were employed by the company at all because of a lack of paperwork, including pay stubs.
"I know we have not been sent these pay stubs," one employee said. "Can you just tell them to send these pay stubs? You need to send them to all of us."
"Yes, because I've never received them," another chimed in.
The recording also reveals other internal issues plaguing the company, including employees being misled about a $25 million investment they were told was finalized with Comcast Corp. Instead, Bloomberg reported, the telecommunications company pulled out after it saw the festival was headed for disaster.
Another employee also asked McFarland about a possible federal investigation into the company.
"Do we have any concern about the FBI?" he asked.
"I don't know, I think that's really more of an individual thing," McFarland said, adding that employees could contact the firm's attorneys for help. "The company has counsel I'm happy to loop everyone with if you have any particular questions."